Main points of investment:

1. The equilibrium configuration of the industry is recommended under the condition of extreme differentiation of the market. According to Anxin strategy, the A-share industry and individual stock valuation differentiation index is currently at a historical high, the previous market valuation differentiation deduces to the ultimate post-holding stock valuation correction, the current stage is more suitable for balanced allocation. The AH weight of the Shanghai, Hong Kong and Shenzhen 500 Index accounts for half of the total weight, and the industry combines the respective advantages of the two markets. Hong Kong stocks focus on large technology companies, large finance with low valuations and optional consumption, while A shares focus on alcohol, medicine, mature industrial enterprises in daily consumption, etc., which highlight the allocation advantages, and the distribution of the index industry is more balanced than that of a single market.

two。 China's core assets are expected to maintain a high premium for a long time. First of all, the Hong Kong stock market should become an important part of the asset allocation portfolio of Chinese investors. in the long run, the Hong Kong dollar has a linked exchange rate system, and mainland investors can get a decentralized allocation on the exchange rate. at the same time, listed companies and A shares in the Hong Kong stock market are complementary, including a large number of emerging technology growth companies to provide a good long-term allocation value. And at present, the main macro, liquidity and fundamental factors of Hong Kong stocks are still improving. Core assets are expected to remain in excess in the medium to long term. Core assets, usually as stocks with large market capitalization in the industry, have strong financial strength, and have the scale effect of constantly consolidating their own moat in the stock competition, often with a high degree of industry concentration. This year, the surging southward funds also prefer to replenish the core assets of Hong Kong stocks.

Huitian Fuzhong Stock Exchange Shanghai, Hong Kong and Shenzhen 500ETF (code: 517080, referred to as Shanghai, Hong Kong and Shenzhen 500ETF Fund) is the first Shanghai, Hong Kong and Shenzhen 500 ETF established in the market. The product was listed on February 22, 2021, mainly investing in constituent stocks whose tracking target is the CSI Shanghai, Hong Kong and Shenzhen 500 Index (H30455). The management fee is 0.15% lower than that of similar products.

The CSI Shanghai, Hong Kong and Shenzhen 500 Index selects 500 stocks of large-scale and liquid companies from the interconnection range listed on the Shanghai, Hong Kong and Shenzhen stock exchanges to form sample stocks to reflect the overall trend of core assets in Shanghai, Hong Kong and Shenzhen and to provide diversified investment targets for the market. The analysis of its investment value is as follows:

1. Net worth performance: AH equilibrium allocation reduces index volatility, risk-adjusted returns are better than the main broad bases, and the market is more defensive during the downward period. Since the release date of 2014-11-28, the annualized return of the index is 8.8% better than that of the Hang Seng Index (3.2% for the same period), the pullback and volatility are significantly lower than the main wide-base index of A-shares, the risk-adjusted return is dominant, and the allocation value is prominent. Recently, with the rapid upward correction of US bond yields on all major types of assets, the pullback during the index period is less than the main broad base of A shares and is more defensive.

two。 Industry distribution: more balanced, complementary advantages. Industry distribution focuses on large finance (26.8% / real estate 4.9%), large technology (information technology 20.4%), large consumption (optional consumption 12.0% / daily consumption 10.3% / medicine 7.9%), cyclical category and other industries are equally balanced (industry 8.1% / materials 4.7% / utilities 2.3% / energy 1.5% / telecom services 1.1%). According to the listing location, 353 shares listed on the Shanghai and Shenzhen stock exchanges accounted for 56% of the total weight of the index. 147 only listed on the Hong Kong Stock Exchange accounted for 44% of the total weight of the index.

3. Valuation and earnings: the horizontal comparison of valuations is much lower than that of the S & P 500, with strong profitability. The index, which covers the top 500 companies in all sectors in China, is expected to match the S & P 500 in the long run, but the absolute valuation (PE_TTM 19.78) is much lower than that of the S & P (PE_TTM 38.96) in terms of horizontal comparison. The index covers China's top 20 weighted stock markets, with an average ROE of 15.4 trillion, with Tencent, Maotai, Wuliangye, HKEx, Midea, Hengrui and Longji all above 20. And a flexible adjustment is carried out every six months, and the timely inclusion of the newly listed giant companies in Hong Kong stocks ensures the full coverage of the index to China's high-quality companies.

4. Constituent stocks: covering the high-quality core assets of the Greater China region, the style of large and medium market capitalization, and the relatively uniform distribution of weights. The top 20 stocks cover the core assets of Greater China, including Hong Kong Internet leaders (Tencent, Meituan, Xiaomi, etc.), A-share consumer leaders (Maotai, Wuliangye, Midea, Gree, China China Free, etc.), financial industry leaders of the two places (AIA, HSBC, Ping an, China Merchants Bank, HKEx, etc.) and industrial leaders (Ningde, Longji, etc.). These core assets have stable operation, high market share, good performance and strong R & D capabilities. While enjoying the booming Beta, they can also reap their own Alpha beyond the cycle. From the quantity point of view, there are 78 free circulation market capitalization of more than 100 billion, the top ten heavyweights account for about 29%, the distribution is more uniform.

The product manager has a lot of experience. Huitianfu Fund is one of the first-class comprehensive asset management companies in China. As of March 2020, the management scale of the company's 168 products is nearly 800 billion yuan, ranking in the top three among public offering funds. The company also has rich experience in index management in the field of ETF. As of March 2021, its 13 non-goods-based ETF have layout in wide base, industry and theme products, and the product line covers a wide range of products and is constantly expanding. Ms. Dong Jin, a fund manager with a master's degree in western economics from Peking University, has 12 years of experience in securities industry. She currently manages a number of index products and has rich research and practical experience in quantitative investment.